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Vonage VoIP Drives Down Telephone Bills

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Dialing For Fewer Dollars

February 5, 2005

By Angie C. Marek

Sarah Malik, a Pakistani-born doctor living in New York City, understands the value of a telephone call. With family sprinkled throughout Pakistan and Great Britain, Malik, 29, used to spend $250 a month on international calls plus an additional $70 for domestic service. Then she came across an ad for "voice over Internet protocol" (VOIP), a technology that allows her to chat for less over a high-speed Internet connection. In September she swapped her AT&T long-distance plan for CallVantage, the company's Voip service. Now her bill is around $100 a month.

Voip is whittling down the phone bills of a growing number of Americans. While only 130,000 people paid for the service in January 2004, the number was closer to a million by the end of the year, according to the Yankee Group, a technology research firm. Household names like Verizon and AT&T now offer Internet telephone services. And in January, Comcast Cable jumped into the Voip game, announcing it will offer telephone, Internet, and cable television for a discounted price. The Yankee Group estimates 17.5 million households will be hooked into Voip by 2008.

That's in part because you don't have to be a tech geek to set it up now. Users first need broadband Internet service, a must for VOIP. From there, phone plans can be scooped up at places like Best Buy or Circuit City--or right on the Voip company's website. A start-up kit usually comes with the deal, complete with an adapter box and, in some cases, a tangle of cables. Then, just plug a regular, bread-and-butter phone line into the adapter, and stick the adapter into a broadband modem. Voip provided by cable companies is a bit different: CableVision, for instance, sends over a repair guy to set up its phone services.

A Voip plan is usually just a fraction of the cost of traditional phone service or cellphone calling plans.

Vonage, currently the largest Voip provider, with 400,000 subscribers, offers an unlimited calling plan in the United States and Canada for $25 a month. International calls range from $2.10 a minute for calls to Antarctica to 3 cents a minute for chats with long-lost friends in Great Britain, France, Germany, Italy, or Hong Kong. There are also several free Voip services, like Skype, though both the caller and callee usually have to sign up for the service. Free Voip users create a buddy list, plug a headset or microphone device into their computers, and then chat over the Internet with any of Skype's 13 million users.

Bonus features. VOIP's attraction is buoyed by a host of features not available on traditional landlines. Users can select a telephone number with almost any area code, for starters. Pete Romfh, a 60-year-old engineer in Houston, decided to sign up for a Voip Chicago line so his son Padraic in Chicago could call him without sapping his long-distance budget. And noncable Voip services are portable, meaning you can tote the adapter box on a family vacation, plug it into a broadband connection at your posh hotel, and pick up calls to your home. Voice mail offered from the big providers can be rigged to send out E-mail every time a new message arrives--with a sound file of the yakking attached.

And Voip phones can deploy a decoy busy signal during certain times (like an episode of Desperate Housewives ).

Voip also can execute feats of call forwarding so a call can bounce from home phone to office phone, cellphone, or voice mail in any order. "My phone can basically find me, follow me, or hide me," says Romfh.

But Voip is hardly perfect. Most users equate the sound quality of Voip calls to that of a cellphone conversation.

And if the power cuts out or your broadband connection shuts off, forget about the phone. Then there's the issue of 911 emergency calling. With VOIP, operators are not able to detect the location of the emergency, so callers need to be able to say where they are.

But the occasional blips don't faze Malik. She's just glad Voip has given her a guilt-free way to call her parents and sister in Pakistan. "I'm six months pregnant with my first child. My mother and sister are so excited and deeply concerned about everything," Malik says. "We're calling each other about it all the time."

Vonage: Unlimited chatting in the U.S. and Canada for $25 a month.

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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See for details.

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